GasBuddy’s head of oil analysis, Patrick De Haan, explained what factors could cause the fall in gas prices to “stifle”, warning that “we are not out of the forest yet”.
De Haan made the argument to FOX Business’s “Mornings with Maria” on Monday, as the national average of a gallon of gasoline dropped slightly to $ 4.52 from $ 4.53 the day before, according to AAA .
Gasoline prices have been falling since reaching a high of $ 5.016 on June 14th. One week ago, the average price of a gallon of gasoline in the U.S. was $ 4.67; and, a month ago, it was just under $ 5 to $ 4.98, according to AAA, which noted Monday’s national average was $ 1.35 more compared to the same time last year.
De Haan told ‘Mornings with Maria’ that “there is the potential” for the United States to “see the national average fall below $ 4 a gallon in mid-August.”
The analyst then warned that “there are still many potential challenges,” which include the hurricane season and the outcome of the earnings season.
“We’re seeing pretty good earnings reports coming out, which is raising the outlook that maybe the economy won’t be heading into this deep recession,” De Haan said.
“So keep in mind that while the future may look good with falling prices, if we look at continuous positive economic data, we could see that falling prices will stop below this 3.99 handling dollars “.
Gas prices have been falling since reaching a high of more than $ 5 on June 14th. Photo of SAUL LOEB / AFP via Getty Images
De Haan provided the information as oil rose above $ 100 a barrel on Monday.
“Markets are extremely tight,” De Haan stressed.
“We are still not out of the forest just because prices are going down, things are still very tight globally; supply is that demand for gasoline, especially diesel, is also problematic.
Americans will spend $ 200 million less on gasoline tomorrow compared to mid-June.
– Patrick De Haan ⛽️📊 (@GasBuddyGuy) July 18, 2022
He went on to point out that as “supplies are still very limited, if we have a major hurricane in the Gulf of Mexico that closes, a couple of major refineries, we will go up again.”
“And so motorists should face the reality that while we enjoy lower prices, Americans now spend $ 200 million less a day. We can go straight back to some of those apocalyptic numbers if we see that the right hurricane removes part of that vital supply, ”De Haan continued.
Millions of Americans have suffered financial stress as inflation remained painfully high in June, and consumer prices hit a new four-decade high that exacerbated the situation.
Last week, the Department of Labor revealed that the consumer price index, a broad measure of the price of everyday goods, including gasoline, groceries and rents, rose 9.1% in June compared to a year ago. Prices rose 1.3% in the one-month period since May. These figures were much higher than the general figure of 8.8% and the monthly gain of 1% predicted by Refinitiv economists.
The data marked the fastest rate of inflation since December 1981.
Price increases were significant: energy prices rose 7.5% in June from the previous month, and rose 41.6% from last year. Gasoline, on average, costs 59.9% more than a year ago and 11.2% more than in May.
Megan Henney of FOX Business contributed to this report.